Fleishauer: State contract creates a monopoly (column)

Skyward employees participate in a 2012 training session. The company lost a state contract to provide information systems in schools.

Our state government claims an overriding priority to create jobs. It has granted tax breaks, enticements and lower regulatory standards, yet Wisconsin lags way behind most states in job creation.

In this environment, the Department of Administration still decided that a potential $80 million of taxpayer funds in the next 10 years should be sent to a Minnesota company to provide an information system for Wisconsin public schools.

The result? A homegrown Wisconsin corporation, Stevens Point-based Skyward Inc., which presently provides information systems for almost half of our school districts, will lose that business and almost certainly will leave the state, taking with it hundreds of well-paying jobs.

This comes despite the publicly stated intentions of our governor to create jobs in Wisconsin and reward state-developed industry.

The situation began when the Legislature recently passed a law requiring the Superintendent of Public Instruction working with the governor's office to "establish a student information system to collect and maintain information about pupils enrolled in public schools." Although the law required all school districts to use the system, it didn't require a single-provider monopoly.

With modern computer technology, local information systems could provide data to a central information system easily, and without school districts incurring expense to change software and retrain staff members. Despite that, our government has decided to create a very lucrative monopoly for one provider of information systems in the public schools.

It would appear that the Legislature, the governor and public agencies have forgotten Wisconsin's policy on competition. In the board game Monopoly, our purpose is to drive everyone else out of business. But real monopolies, business concerns which completely dominate a market, have been outlawed since the late 1800s when the Sherman Antitrust Act first prohibited such conduct.

What allows the Legislature, the governor, the Departments of Administration and Public Instruction and the superintendent of public instruction to create a monopoly to provide an information system for school districts? It would seem they all could go to prison, but issues abound. The law suggests that public interests may override the protection given to competition. There is little case law to define the problem; however a 1925 case suggests that the Legislature can "legalize monopoly. This it has done with ... all of the public utilities of the state. If ... the law gives rise to oppressive monopolies, the Legislature may either repeal the law or fence it with further restrictions, as in its opinion public interest may require."

What does the public interest require? When a law or government action defies important public policy such as promoting competition, it requires a reasonable public purpose. It should state the reasons that express the necessity to override that policy.

The founding fathers of this country detested government-supported monopolies which the British King granted through corporate charters. They believed that using the power of government to enrich the few at the expense of the many was inappropriate and thus disfavored.

With the present computer technology and the easily foreseeable harm to jobs in Wisconsin, the necessity to create such a public monopoly seems dubious at best. Job creation becomes a government emergency when you have the ability to prevent job loss through competition.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

Email this article

Fleishauer: State contract creates a monopoly (column)

Our state government claims an overriding priority to create jobs. It has granted tax breaks, enticements and lower regulatory standards, yet Wisconsin lags way behind most states in job creation.

A link to this page will be included in your message.

Join Our Team!

If you are interested in working for an innovative media company, you can learn more by visiting: